Weekly Trades (16)

A four consecutive red days + yesterday’s close below 100$ all indicate that a possible bounce of the low doesn’t have to be so persuasive as it looks according to the Friday’s daily candle. If you’d look carefully at the chart you can’t find more than two consecutive red days from the start of this rally in December/January. Also the 60% retracement level from the top has been breached, that most traders consider to be a last barrier for corrections in trending markets.

Now the real trading can start. It is not hard to book some good profits, when the market is increasing by dozens of percent day by day. Every monkey trained in pushing a right buy and sell button can be profitable in those conditions.

So what to expect in the following days? I’m still a long-term bull, not so much in the short-term outlook. No market however strong fundamentally can grow exponentially forever. A steep up move is followed by a periods of consolidation or a sudden and big falls. BTC/USD has experienced strong increases since January that resulted into the sudden fall last week. Now it could have to be a time for some rest.

A brief review of the last week trades:
Buy TP1= 22%
Buy TP2= 35%
Buy TP3= 70%

If you’d taken the sell trades, they would be profitable also:
Sell TP1= 1,5%
Sell TP2= 5%

Here are the trading points for the coming week (based on the Bitstamp data):
Buy: 100.20 SL: 94.80 TP1:111.70 TP2:118.70 TP3: 133.20
Sell: 89.80 SL: 95.00 TP1:85.20 TP2: 70.00 TP3: 51.00

My personal bias is down, but let the market decide the direction. Do not forget, trading is not about foreseeing the future price, but to be prepared and react on what the market is offering to you. Respect it.

You sold Bitcoin yesterday? I’m so sorry

Heh. Bitcoin showed its power again yesterday. After huge gains in the last days finally a calm-down sell-off came in. The 250 $ level is too strong for an easy, unproblematic break through.

I hope those of you trading short-term strategy have booked profits at one of my weekly targets. And the last one was right at 250. If you are a long-term trader or investor and you’ve got scared by this “whatever fucking irrelevant reason” dump, I’m so sorry. Especially when you didn’t buy back at a lower price. But you deserve it if you are watching every intraday price move and overlook a big picture.

And the big picture says we are still in the bull market. Price corrections between 30 – 60% are perfectly in line with the trend.

Bitcoin Speculators Are Laughing At Anyone Who Calls It A Bubble

Of course I don’t agree with everything written in this piece, but would like to point out one important point of view that seems author realizes very well. There’s hardly more essential criteria for a speculator considering whether to take a trade (investment) or not than comparing a potential loss and profit. Bitcoin offers a tremendous risk/reward ratio. Even when at 300 or 500 $/BTC. And big players coming in know it quite well.

Now, does that mean the price won’t drop in the future back down to 50 or 20? No, maybe it will. Does that mean the price will hit 1000 someday? Sure it will and probably much more.

There’s simply no other way than up. Especially when you see Bitcoin not only as a trading article with a possible pump-dump moves, but also the storage of value (collapsing fiat currencies) and the transactional money (making current banking system obsolete).

Of course many speculators have no clue of what Bitcoin really is and when the next round of “Oh My God The Bubble Is Bursting” sell-off comes you will just smile and buy some more precious digital.

 

Bitcoin Speculators Are Laughing

The largest bubble in the world? Fiat currencies and central banking

If you are not a regular reader of Trace Mayer’s articles you may miss some substantial information.

“There are only about 80,000 bitcoins of ‘float’ on a daily basis. Remember, prices are set at the margin. Simplistically  and only for an example in aggregate, this means that if there is a positive funds flow into bitcoins of about a mere $4m then it will move the price by about $50.

So, obviously, if there are any large blocks of bitcoins, ‘walls’, are gobbled up extremely quickly by this hot money from VCs and Wall Streeters. If that float can be reduced from 80,000 to 40,000 then the same $4m will move the price $100. That means VCs and Wall Streeters will have to pay more dearly to get any bitcoins. Squeeze them for all they are worth!”

“You know what’s cool? A $150 per bitcoin? No, a $1m per bitcoin. It may take a decade to get there but the fiat currency market coupled with fractional reserve banking is the largest bubble in the world”

“And for those who think there is a massive Bitcoin bubble. The last bubble went from $0.05 to about $32 and unlike so many who are calling this a bubble I know what it felt like back then because I was there. For a comparable move the bitcoin price would need to move from about $5 to around $3,200, a 20x rise from current prices, and we are only about 5% up this ‘wall of worry’.”

Weekly trades (15)

Just a quick recapitulation of the last week trading result:
3,7% when you exited according to the plan
38% return when you exited at week’s high (the highest possible return)

The target was too much conservative and I can adjust it in the next plans because a daily returns are increasing so our weekly target also will. But remember, these trades are a short-term ones and our goal is to be profitable and generate some cash-flow in a long-term, whether the market is trending up, down or consolidating. That’s why I choose such a “conservative” targets. Of course the final cut is always on your decision.

Also, look at the profit difference of maximum potential (38%) and our target (3,7%). That’s why I keep saying you profit most in this market when sitting tight with your long-term buy position from the start of this rally. Be it 0,1$, 1$ or 10$. Well if you weren’t so lucky (smart) and have bought just recently the same applies. Because this market is heading higher, much higher. That doesn’t mean it can’t drop below 100 or 80$. But when you play a long-term game that potential sell off wouldn’t be much to bother with. Because from here it can go to 70$ and technically still perfectly stay in the bull market.

Now to the current outlook and trades.
It looks like our trading week should start on Sundays. Bitcoin is live 24/7 and doesn’t know weekends and sometimes even a banking holidays.

mtgoxUSD  1 day   #4 41371.5557

The USD/BTC price on Mt.Gox broke through 147.05 today, that is going to be our buying point for the next week. You can place a stop-loss order just below 139.50. If the market wants to head higher, this level should have been safe. I was too much conservative last week as regards the profit target. So now let’s set the first one at 179.00, the 2nd at 199. In case of this buying frenzy will continue the same pace as in the previous days, we can easily see Max Keiser’s short-term target of 250 USD been hit.
What about a sell point? What? Do you really want to short this market? OK, then try to enter at 142.05 with the stop-loss at 145. First PT at 140.00, 2nd 135.20.
Hmm, now let’s hope the price is going to correct to the buy point or 150 at least.